patrick.net

socal2 says

Regarding Corporate profits, America already has the highest Corporate Tax Rate in the entire world!

http://www.politifact.com/punditfact/statements/2014/sep/09/eric-bolling/does-us-have-highest-corporate-tax-rate-free-world/

How much higher do the Progressive want to raise the Corporate Tax rate to keep Stockton's police chief making $204,000 for the rest of his natural life?

Who's talking about corporate tax rates?? What does that matter? Regardless, the graph I posted is AFTER TAX.

socal2 says

Again - it just amazes me how the discussion is NEVER about the quality, performance and efficiency of our massive government bureaucracy. When our government fails us in our schools, fails to maintain infrastructure, to the corruption at the VA - Progressives just say we need to raise taxes and give the government more money.

Even when cities like Stockton hit rock bottom due to their poor management and greed, Progressives want everyone else to pay up (tax payers, reduced servics, bond holders) - but wants to leave the unions and government worker's compensation untouched.

Never? It seems like the discussion is quite often about quality of government. If you want to change it, elect people that will do as you wish...

As an aside--if those positions are so overpaid, why aren't there people falling over each other to apply to be cops or teachers?

tatupu70 says

Who's talking about corporate tax rates?? What does that matter? Regardless,
the graph I posted is AFTER TAX.

Just pointing out that we already have the highest Corporate Tax rate in the entire world. Why else was that graph posted unless you want to argue we need to raise Corporate taxes even higher to fund millionaires working for our government who are bankrupting our cities?

tatupu70 says

As an aside--if those positions are so overpaid, why aren't there people
falling over each other to apply to be cops or teachers?

Stockton pays their cops much higher than the State and National average ($150K year). They pay the Cops so much, they have to reduce the number of cops they employ because they can't afford more - which is resulting in more crime like we saw in Vallejo and Oakland. Basically the City and unions are choosing to pay Cop's massive pensions before paying for public safety.

http://blogs.reuters.com/muniland/2013/03/27/this-is-why-stockton-is-broke/

socal2 says

Just pointing out that we already have the highest Corporate Tax rate in the entire world. Why else was that graph posted unless you want to argue we need to raise Corporate taxes even higher to fund millionaires working for our government who are bankrupting our cities?

The graph was posted to rebut the usual argument that companies are cutting pay and benefits (read pensions) because they HAVE to in order to stay "competitive".

And, like I said, the tax rate doesn't seem to be eating into the after tax profits, does it? (hint--look at effective tax rate vs. stated tax rate).

tatupu70 says

The graph was posted to rebut the usual argument that companies are cutting
pay and benefits (read pensions) because they HAVE to in order to stay
"competitive".

But we are talking about Municipalities.

You seem to be arguing that Corporations in New York or outside Modesto need to pay higher taxes to keep Stockton from going through bankruptcy. As if raising taxes will fix these pension Ponzi Schemes.

Stockton foolishly spiked their pensions and compensation packages when they saw all of the increased property tax revenue during the housing boom. CALPERS told all these cities that it was OK because we were in a new normal.

Instead of being careful and treating the increased property tax revenue as a short term windfall, both CALPERS and the cities thought the gravy was never going to dry up and gave everyone a big fat raise with an outrageous pension plan.

Well - it has dried up - and everyone has to give back some. Including city workers. If the citizens of Stockton now have to live in a total shit-hole of a city watching their property values sink even further due to the City's financial mismanagement and scourge of bankruptcy, all the while they are plagued with increased crime because Stockton can't afford more cops making $150K/year with fat pensions - it is only fair that the City reforms their pension system that is most responsible for the bankruptcy situation.

socal2 says

But we are talking about Municipalities.

Who's we? I was responding to hh's post about private sector pensions.

socal2 says

You seem to be arguing that Corporations in New York or outside Modesto need to pay higher taxes to keep Stockton from going through bankruptcy. As if raising taxes will fix these pension Ponzi Schemes.

Not sure how you could come to such a conclusion.

As another aside--when did the public forget what a Ponzi scheme is? Was it right wing propaganda that brainwashed the public to try to eliminate social security and pensions?

In any event, if you're arguing specifically about Stockton--I agree pension reform is needed. Illinois is the same.

tatupu70 says

In any event, if you're arguing specifically about Stockton--I agree pension
reform is needed. Illinois is the same.

There you go. The thread is specifically about public sector pensions.

You can also add Vallejo, San Bernardino and Detroit to that list.

Basically, any city or state that is going bankrupt these days is likely due to outrageous pension committments the cities made during the housing bubble.

Was it "left wing progaganda" that convinced a buch of Progressives that a person could work only 30 years and expect their employer (either public or private) to support them for another 40-50 years at near full pay and think it was sustainable?

socal2 says

Basically, any city or state that is going bankrupt these days is likely due to outrageous pension committments the cities made during the housing bubble.

See--this is where you run into trouble. Don't extrapolate. First--pensions aren't the only reason Stockton is in trouble. Second--you certainly can't generalize to any city or state.

socal2 says

Was it "left wing progaganda" that convinced a buch of Progressives that a person could work only 30 years and expect their employer (either public or private) to support them for another 40-50 years at near full pay and think it was sustainable?

Nope--it was (and is still) easily possible. What isn't sustainable is companies (or municipalities) underfunding pensions and assuming ridiculously high investment returns will make up the difference. Or companies raiding the pension plan to fund bonuses for the top executives. When you do those things, then the pension plan becomes unsustainable.

tatupu70 says

See--this is where you run into trouble. Don't extrapolate. First--pensions
aren't the only reason Stockton is in trouble. Second--you certainly can't
generalize to any city or state.

Pensions are Stockton's largest liability - by far ($900 million and counting).
http://nation.time.com/2013/07/25/the-wages-of-bankruptcy-stocktons-cautionary-tale-for-detroit/

The fact that Vallejo is facing another bankruptcy after they raised taxes, cut services and left pensions untouched - suggests that pensions are a big problem for many cities and states.
tatupu70 says

Nope--it was (and is still) easily possible.

Huh? Where has it been possible to work 30 years and get 40 additional years of near full pay at retirement? Social Security and early pension plans were never designed this way to support people this long after they stopped working for the employer. Back then, people may have lived another 10 or 20 years after retirement - not 40 years after retiring in their early 50's!

Besides, didn't GM have these types of outrageous pensions and early retirements requiring the US tax payer to bail them out?

socal2 says

Besides, didn't GM have these types of outrageous pensions and early retirements requiring the US tax payer to bail them out?

GM was allowed to underfund the pensions during the boom stock market years in the 80s and 90s. The better the stock performance, the more they were - perversely - allowed to underfund.

thunderlips11 says

GM was allowed to underfund the pensions during the boom stock market years
in the 80s and 90s. Had they contributed normally, they wouldn't have been
bailed out.

Right - and somehow GM would have stayed in business if it spent EVEN MORE of their money on their already high labor and pension liabilities instead of money to modernize their factories and better engineering to design better cars that people actually want to buy?

socal2 says

Right - and somehow GM would have stayed in business if it spent EVEN MORE of their money on their already high labor and pension liabilities instead of money to modernize their factories and better engineering to design better cars that people actually want to buy?

The issue is pension funding. The execs, who loved underfunding pensions and generally love cutting workers' pensions, keep trying to sue to stop their 6/7 figure pensions from being cut - our money is in a separate account from the hourly wage slobs, dammit!

Three judges from the Sixth Circuit Court of Appeals in Cincinnati have ruled that 100 retired General Motors executives will have to continue with their reduced pensions, based on conditions outlined by the U.S. Treasury from the 2009 bankruptcy. GM was required to cut executive pensions that exceeded $100,000 a year by two thirds.

According to the Detroit News report, the retired executives claim that “GM misquoted terms of its executive retirement plan and shouldn’t have included benefits from the separate salaried retirement plan when determining if they were subject to the reduction.” Naturally, a lot of former executives feel like they’re being screwed over. For example, Rick Wagoner, former GM CEO, saw his pension drop from $20 million to *just* $8.5 million.

Check out the level of ignorant comments at:
http://www.businessweek.com/articles/2012-06-27/u-dot-s-dot-automakers-cut-retirees-loose

The dumbasses don't realize this is salaried employees, and of course are blaming the union the management and engineers weren't members of.

thunderlips11 says

The issue is pension funding. The execs, who loved underfunding pensions and
generally love cutting workers' pensions, keep trying to sue to stop
their 6/7 figure pensions from being cut - our money is in a separate
account from the working slobs, dammit!

I want to see ALL pensions reigned in to sustainable levels that don't bankrupt cities or major corporations.

How can California cities survive this massive growth in pension liabilities - regardless if they are funded or not? It leaves nothing else for running the basic functions of a city like infrastructure, security and schools.

In 2005 - 1,841 government retirees had greater than $100K pensions a year

In 2012 - 14,763 government retirees had greater than $100K pension a year

That's up 700 percent in less than a decade. The rate of inflation over the same period was 38 percent.

http://www.ocregister.com/taxdollars/city-515888-100k-club.html

I agree with you in that that ALL government pensions should not pay into the 6 figures, from the policeman to the police chief to the Chief of the FBI.

Speaking of Lifetime Pensions, meet the Author whose family used political connections to get him appointed to Annapolis. After contracting TB, he received a LIFETIME pension of 2/3rd his Navy Officer Pay for just a few years - less than a decade - of service. The TB was so bad he lived into 80s - for longer than most of his demographic peers.

As a young man, writing for pulps and living through the Great Depression, he was enthusiastic and grateful for his pension - knowing it allowed him to write and survive even through dry spells when he couldn't sell a single piece.

But once he really started making real money in the 50s and 60s, he began to mock "Uncle Sucker", and took a turn into Libertarian Land...

http://delong.typepad.com/sdj/2014/06/tuesday-book-blogging-jeet-heer-on-robert-a-heinleins-navy-disability-pension-and-social-insurance.html

thunderlips11 says

But once he really started making real money in the 50s and 60s, he began to mock "Uncle Sucker", and took a turn into Libertarian Land...

Military pensions are different because they are not backed by the taxpayers and our soldiers are not communist so stop saying that.

socal2 says

Huh? Where has it been possible to work 30 years and get 40 additional years of near full pay at retirement? Social Security and early pension plans were never designed this way to support people this long after they stopped working for the employer. Back then, people may have lived another 10 or 20 years after retirement - not 40 years after retiring in their early 50's!

oh my god.

how many people retired in their early 50s at 100% of their pay? NO FUCKING BODY. First of all, look at the charts before you blow hot air. Second of all, because somebody spiked, we suddenly have to reform the entire nation's system?

Finally, who the fuck lives into their early 90s?????

Get a grip man.

socal2 says

Was it "left wing progaganda" that convinced a buch of Progressives that a person could work only 30 years and expect their employer (either public or private) to support them for another 40-50 years at near full pay and think it was sustainable?

Are you SERIOUS????? Now you are saying someone will work 30 years and then live 50 more????? Can you please provide some stats on how that POSSIBLY is bringing down calpers? Of course it isn't sustainable because only outliers live that long.

HydroBenghazEbolaCabron says

Military pensions are different because they are not backed by the taxpayers
and our soldiers are not communist so stop saying that.

Military pay and pensions aren't even a fraction of the $150K/year that Stockton Police officers and firefighters get.

I dare say that our military men and women had a much tougher job in the last 10 years with long deployments than your average cop making 6 figures in California.

socal2 says

In 2005 - 1,841 government retirees had greater than $100K pensions a year

In 2012 - 14,763 government retirees had greater than $100K pension a year

That's up 700 percent in less than a decade. The rate of inflation over the same period was 38 percent.

That reform is already in place. Did you know that? Do you read anything but the Register for your information? Of course boomers are going to run away with bags of money; this will be true for anything: medicare, SS, etc. But newcomers max pensions are limited.

socal2 says

$150K/year that Stockton Police officers and firefighters get

You know that is health benefits plus pay, right? If they were working, it would cost the city at least as much. Now, I agree they should be working desk jobs until they are 65. It's bullshit they can start planting gardens at 55. But they sure as hell should not be fighting fires at 55. So the city still has to hire new firefighters capable of doing the job. The only solution is to reduce the factor, which is happening, and limit the max salary, which is also happening. Is it enough? Who knows.

JH says

Are you SERIOUS????? Now you are saying someone will work 30 years and then
live 50 more????? Can you please provide some stats on how that POSSIBLY is
bringing down calpers? Of course it isn't sustainable because only outliers live
that long.

A person can start working for a city at age 21, work 30 years and retire at 51.

Life expenctency in the US is averaging 80 years and will likely go up as we seen increased medical advances over the next century.
http://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy

So the AVERAGE city worker will likely work 30 years and get a MINIMUM of 30 additional years of near full pay in their pensions.

Some people will live to be 90 or even 100. I hope I live that long!

socal2 says

A person can start working for a city at age 21, work 30 years and retire at 51.

"can"

socal2 says

Military pay and pensions aren't even a fraction of the $150K/year that Stockton Police officers and firefighters get.

20 years of service pays 50%.

So: join at 20, retire at 40 with half pay. Live another 40 years, which is equivalent to drawing a full salary for 20. Most retirees draw retirement for 15 years.

I'd say it's about the same, if not more. And dump the $150K example. The overwhelming majority of public employees, with the exception of colonels and generals, don't pull down that kind of cash in retirement.

JH says

Now, I agree they should be working desk jobs until they are 65. It's bullshit
they can start planting gardens at 55. But they sure as hell should not be
fighting fires at 55.

Firefighters have even a bigger scam than the Cops. We don't have structure fires like we did 100 years ago thanks to smoke alarms, sprinklers and better building codes. That is why the firefighter unions worked a deal that a fire truck has to deploy for typical ambulance services (transporting old people to the hospital from old folks homes etc.)

"Over the past 35 years, the number of fires in the United States has fallen by more than 40% while the number of career firefighters has increased by more than 40% (data)."

http://marginalrevolution.com/marginalrevolution/2012/07/firefighters-dont-fight-fires.html

Cops have a much harder job than firefighters IMO. Most firefighters are not battling 9/11 WTC fires or even wild fires outside of California.

socal2 says

A person can start working for a city at age 21, work 30 years and retire at 51.

A person who starts work at 21 and maxes 401k with at least some employer match will be putting away as much as 25% of income and be able to retire early also.

socal2 says

Cops have a much harder job than firefighters IMO.

In Stockton, probably true...hahah

JH says

A person who starts work at 21 and maxes 401k with at least some employer
match will be putting away as much as 25% of income and be able to retire early
also.

*IF* the market returns are favorable enough to allow for early retirement. I guarantee you folks who were looking to retire early in 2008-10 with their 401K's didn't opt out.

One of the most corrupt things with government pensions is that workers are *guaranteed* that payout regardless of market reality. If CALPERS can't provide returns high enough to fund these pension committments, the cities just raise taxes, cut services and bankrupt cities to keep that pension guarantee going.

Why should government workers have a guaranteed retirement above all the other interests in the City that is going bankrupt? This arrangement causes alot of suffering for far more people than just a few thousand government workers in Stockton.

socal2 says

A person can start working for a city at age 21, work 30 years and retire at 51.

Life expenctency in the US is averaging 80 years and will likely go up as we seen increased medical advances over the next century.

http://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy

So the AVERAGE city worker will likely work 30 years and get a MINIMUM of 30 additional years of near full pay in their pensions.

Minimum?? Since when does average = minimum? If the average lifespan is 80, that means half of the people will not collect for even 29 years.

If your entire argument is that some pensions are abused and some are too generous, then I agree. I don't think you'll find too many in opposition.

You run into trouble when you try to make broad generalizations.

socal2 says

Why should government workers have a guaranteed retirement above all the other interests in the City that is going bankrupt? This arrangement causes alot of suffering for far more people than just a few thousand government workers in Stockton.

Because that was part of the agreement when they were hired.

tatupu70 says

Minimum?? Since when does average = minimum? If the average lifespan is 80,
that means half of the people will not collect for even 29 years.

Fair enough - but considering that most government workers in Stockton got gold plated health care plans, have fairly stress free jobs (cops excluded), and can retire early - I'm willing to bet that most live above the average.

And we can certainly expect workers working today will live longer than 80 as life expectency keeps getting older.

tatupu70 says

Because that was part of the agreement when they were hired.

What about the "agreement" that tax payers had that their city wouldn't be run into the toilet with reduced services, higher taxes, higher crime and years of uncertainty with bankruptcy? I am pretty sure that bond holders didn't agree to get $0.01-$0.10 returns on the dollar either.

Bankruptcy is all about breaking agreements when reality hits. Pensions shouldn't be immune because the unions were able to get their slaves in the Democrat party to codify this in our state constitution.

socal2 says

One of the most corrupt things with government pensions is that workers are *guaranteed* that payout regardless of market reality. If CALPERS can't provide returns high enough to fund these pension committments, the cities just raise taxes, cut services and bankrupt cities to keep that pension guarantee going.

This argument sounds good on the surface but you are looking at it from the standpoint of a typical 401k, which is as follows:

The average 401(k) balance hit $89,300 at the end of the year, up 15.5% from $77,300 in 2012, according to an annual tally by Fidelity Investments.

People on the verge of retirement, ages 55 to 64 years old, saw their nest eggs grow to an average balance of $165,200 from $143,300 in 2012

http://money.cnn.com/2014/02/13/retirement/401k-balances/

It doesn't seem possible that 30 years would be sufficient to return enough to retire on interest, but it is, if you save more than a couple bucks here and there.

tatupu70 says

If your entire argument is that some pensions are abused and some are too
generous, then I agree. I don't think you'll find too many in opposition.

I'm willing to bet that the majority of California State and Municipal Democrat politician are against this ruling arguing that no pensions can be cut - regardless of the circumstances.

socal2 says

What about the "agreement" that tax payers had that their city wouldn't be run into the toilet with reduced services, higher taxes, higher crime and years of uncertainty with bankruptcy?

Do you have a copy of that agreement?

socal2 says

I am pretty sure that bond holders didn't agree to get $0.01-$0.10 returns on the dollar either.

I'm pretty sure bondholders were aware of the risks of loaning money to Stockton. Or they should have been-that's for sure.

socal2 says

Bankruptcy is all about breaking agreements when reality hits. Pensions shouldn't be immune because the unions were able to get their slaves in the Democrat party to codify this in our state constitution.

There are a lot of things that shouldn't be allowed, but are. This is way down the list for me.

socal2 says

Fair enough - but considering that most government workers in Stockton got gold plated health care plans, have fairly stress free jobs (cops excluded), and can retire early - I'm willing to bet that most live above the average.

I think we're at the crux of your outrage. You think government workers have easy jobs and are overpaid. I don't think you're qualified to make that determination.

tatupu70 says

There are a lot of things that shouldn't be allowed, but are. This is way
down the list for me.

Really? The single biggest liability most cities have on their books is the lowest priority for reform? I thought you were just saying that Stockton and Vallejo need to reform their six figure pensions?

This is to say nothing about the terrible corruption feedback loop where our tax dollars are being funneled to public sector unions (in the forms of dues) who in turns funnels it back to the Democrat party to get more Democrats elected to protect the unions and government bureaucracy.

Could Democrats hold a near monopoly on California politics if they weren't getting millions of tax dollars from unions to get them elected?

tatupu70 says

I think we're at the crux of your outrage. You think government workers have
easy jobs and are overpaid. I don't think you're qualified to make that
determination.

As I said earlier in the thread, I have spent over 20 years as an engineering consultant working directly for municaplities in California trying to improve their water systems. I was there when many of my clients were celebrating after they got their pension plans massively increased in the late 1990's.

I've watched over the last 20 years as funding for infrastructure continues to get stripped in lieu of funding the general funds and pension liabilities.

I've seen massive administration bloat and ridiculous PC contracting requirements for MBE's and other social engineering.

At least when it comes to Public Works and Engineering, I have seen my fair share of waste and abuse.